John wiley sons 209 fast spare time ways to build zero cash into 7 figures a year in real estate (2004) (pdf)

INTRODUCTION: How This Book Can Make You Rich on Zero-Cash Borrowed-Money Real Estate xiii CHAPTER 1: Build Your Real Estate Wealth on Invest in an Item of Lasting Value—Income Real

G this document

Date: 2005.04.2609:39:12 +08'00'

209 Fast Spare-Time Ways

to Build Zero Cash into 7 Figures a Year

in Real Estate

209 Fast Spare-Time Ways

to Build Zero Cash into 7 Figures a Year

in Real Estate

209 Fast Spare-Time Ways

to Build Zero Cash into 7 Figures a Year

in Real Estate

Copyright © 2004 by Tyler G Hicks All rights reserved

Published by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

No part of this publication may be reproduced, stored in a retrieval system, or transmitted

in any form or by any means, electronic, mechanical, photocopying, recording, scanning,

or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc.,

222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the web

at www.copyright.com Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ

07030, 201-748-6011, fax 201-748-6008

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose

No warranty may be created or extended by sales representatives or written sales materials The advice and strategies contained herein may not be suitable for your situation You should consult with a professional where appropriate Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages

For general information on our other products and services, or technical support, please contact our Customer Care Department within the United States at 800-762-2974, outside the United States at 317-572-3993 or fax 317-572-4002

Wiley also publishes its books in a variety of electronic formats Some content that appears in print may not be available in electronic books

For more information about Wiley products, visit our web site at www.wiley.com

Library of Congress Cataloging-in-Publication Data:

Hicks, Tyler Gregory

209 fast spare-time ways to build zero cash into 7 figures a year in

real estate / Tyler G Hicks

p cm

Includes index

ISBN 0-471-46499-6 (PAPER)

1 Real estate investment I Title: Two hundred and nine fast

spare-time ways to build zero cash into 7 figures a year in real estate

INTRODUCTION: How This Book Can Make You Rich on

Zero-Cash Borrowed-Money Real Estate xiii

CHAPTER 1: Build Your Real Estate Wealth on

Invest in an Item of Lasting Value—Income Real Estate, 3;

Recognize the Many Pluses of Real Estate, 3; Build Your Real Estate Riches Minute by Minute, 5; Start-Ups Win in Almost Every Real Estate Deal, 7; Speedy Results Are Possible in Real Estate, 10; Get in

on Zooming Worldwide Growth, 12; Good Financing Can Be Yours Even with Bad Credit, 13; Take the Billions Being Offered to Real Estate Investors Today, 14; Forget about a Real Estate License When You’re an Investor, 15; Get into Non-Ownership Income Real Estate, 16; Plenty of Free Advice and Assistance Can Be Yours, 18; Grow Rich with Tax-Sheltered Real Estate Income, 18; Winners Are the Real Estate Norm, 19; Getting Real Estate Funding the Smart Way, 22; Take the First Step to Your Real Estate Wealth, 22; Your Keys to Real Estate Riches, 24

CHAPTER 2: How to Base Your Real Estate Riches

on Borrowed Money

Know Why Income Real Estate Is So Good for You, 26; Pick the Location for Your Future Properties, 27; Local Properties Are Ideal for Beginners, 27; Figure What Down Payment You’ll Need, 28;

Compute Your Needed Starting Cash, 29; Negotiate Your Way to Success, 31; Bootstrap Your Way to Real Estate Ownership, 32; Find Rental Income Assistance Everywhere, 33; Begin Your Income Real Estate Ownership Journey Now, 34; Stay Focused on Your Plan, 36; Manage Your Holdings for Maximum Income, 39; Increase Your Profits from Every Property, 41; Learn All You Can about Your Holdings, 42; Real-Life Examples of Fast Buildup of Ownership Assets, 43; How to Acquire More Residential Income Properties, 46;

“Mud Flats” Can Be Money Machines, 46; Expand Your Ownership

25

to Larger Properties, 47; Forget “Advanced Education” for Your Success, 48; Quick Steps to Make Money in Distant Real Estate, 50; Your Keys to Real Estate Riches, 51

CHAPTER 3: Start Your Real Estate Empire Without

Defining the Zero-Cash Deal, 53; Who Uses Zero-Cash Deals? 54; Focus on the Down Payment You Need, 54; Use Borrowed Money

to Begin Your Empire, 55; Start with a Personal Loan, 56; Where and How Your Personal Loan May Be Made, 57; Secrets to Getting Personal Loans More Easily, 58; Where a Good FICO®

Score Will Get You Your Loan, 59; Use a Secured Loan for Your Down Payment, 59; How Lenders React to Solid Collateral, 60;

Enhance Your Credit with a Guarantor, 61; Use a Home Equity Loan for Your Down Payment, 62; Get Property Improvement Loans for Your Down Payment, 64; Tap into Your Credit Card Lines of Credit, 65; Get the Seller to Finance Your Down Payment, 67; Use a “Gift Letter” for Family Loans, 68; Never Overlook Possible Partners for Your Down Payment Loans, 70; See if You Can Get Some of Your Down Payment Back on Closing, 71; Your Keys to Real Estate Riches, 72

CHAPTER 4: Bootstrap Your Way to Your Real Estate Cash 75

How to Get in on Good Deals Now, 76; Explore the World of Real Estate Windfalls, 77; How Mortgaging Out Can Work for You, 78; Use Other Rules of Real Estate for Your Mortgaging Out, 79; How

to Apply These Powerful, But Simple Rules, 80; Use Every Method You Can to Mortgage Out, 82; The Powerful Methods You Can Use

to Mortgage Out, 83; Build Your Mortgaging-Out Wealth Quickly, 84; Know the Other Perks for You from Mortgaging Out, 86;

Where and How to Start Getting Mortgaging-Out Cash, 87; Try Your Mortgaging-Out Luck on Multi-Family Buildings, 89; If You Have Time and Experience, Mortgage Out in Development, 90;

Your Keys to Real Estate Riches, 92

CHAPTER 5: Use Single-Family Homes for

Your Quick Real Estate Start-Up 93

Start with the Possible and Grow Bigger, 93; Know the Numbers

of Your Real Estate Opportunities, 94; Now Here Are the Numbers of Your Single-Family Home Wealth, 95; What Types of Single-Family Homes Can Make Me Rich? 97; Now Let’s Get You Started Getting

ix

Rich, 98; Detached Single-Family Home Wealth Building, 98;

Work the Numbers for Each Property You Acquire, 101; Put Your Numbers to Work, 102; See the Numbers of Your Real Estate Fortune, 104; Cautions for You When Buying Any Single-Family Home, 105; How and Where to Get Single-Family Home Financing, 106; Quick Benefits Offered to You by These Lenders, 107; Your Eight Steps to Quick Single-Family Home Financing, 112; Other Types of Single- Family Home Investments, 114; Your Moneymaking Tips for Single- Family Home Success, 117; Your Keys to Real Estate Riches, 119

CHAPTER 6: Where to Find Money for Your Real Estate

Your Money Sources Are Almost Unlimited, 122; Getting the Easiest

of All Real Estate Money, 123; Where to Find First Mortgage Lenders, 123; Finding the Second Easiest Real Estate Loan, 124; Have Others Finance Your Income Property Fix-Up, 126; Get Guaranteed Loans for Your Investment Real Estate, 127; Get Grants for Beneficial Real Estate Projects, 128; Apply for and Get Lines of Credit for Your Investments, 130; Private Financing Could Be Your Key to Riches, 131; Get Your Real Estate Money from Public Sources, 132; Raising Real Estate Money from the Public, 133; Work with Investor Groups for Your Financing, 136; How to Raise Real Estate Money from Limited Partnerships, 137; Use 100 Percent Financing Funders to Get Your Multi-Unit Money, 137; Lenders That Fund Multi-Unit Real Estate Projects, 139; Your Keys to Real Estate Riches, 144

CHAPTER 7: Creative Financing of Your Real Estate Fortune 145

Quick Proof That Creative Financing Really Works, 145; Seven Reasons Why You May Need Financial Help, 146; How to Overcome Financial Problems, 148; Get Income Property with an Option, 149; Buy Properties Having Assumable Mortgages, 150; Assumable Mortgage Possibilities for You, 153; Find Zero Percent Down and

100 Percent Lenders, 154; Use a Lease Option Contract to Control Property, 154; Use Credit Card Lines of Credit, 156; Flip Real Estate with Creative Financing, 157; How to Start and Be Successful in Flipping Properties, 158; Take Lenders Out of Foreclosure Properties, 159; How to Be a Hero with Lenders, 159; Work with the FDIC and VA to Flip Properties, 160; Get Section 8 Tenants for Steady Rental Income, 161; Buy and Control Properties in Inner- City Areas, 162; Search for Low, Low Down Payments, 164; Borrow

to the Hilt for Income Real Estate, 165; Use Home Equity and

Personal Loans to Build Your Wealth, 166; Mortgage Out to Get Paid for Creative Financing, 167; Other Ways to Creative Financing, 169; Your Keys to Real Estate Riches, 169

CHAPTER 8: Find and Use Unique and Unusual

Sure Steps to Finding Your Suitable Lenders, 171; Pick the Type of

Real Estate You Want to Own, 172; Find the Unique Lender for Your Kind of Real Estate, 173; How to Find Unique Lenders for Land Deals, 173; Search for Unique Residential Lenders, 174; Start Small

in Commercial Properties, 176; Know the Range of Commercial Properties, 176; Wait Before Investing in Industrial Properties, 183; Unique Funding You Can Do Yourself, 183; Two Quick Unique Ways to Raise Money Yourself, 183; Use a Limited Partnership to Raise the Money You Need, 183; Six Steps to Setting Up Your Limited Partnership, 184; Try a Real Estate Investment Trust to Raise Your Money, 185; Your Keys to Real Estate Riches, 188

CHAPTER 9: Use Sellers Having Built-In Funding for Your Deals 189

Eight Real Estate Deals with Financing in Place, 189; Government Foreclosures Often Come with Financing, 190; Do Internet Searches for Your Properties, 192; Don’t Overlook New Property Financing, 193; Take Advantage of “Financing Available” Offers, 195; Look for and Find Zero-Down Properties, 196; Look for and Buy FSBO Properties, 198; Private Lenders Could Be Your Money Source, 199; Look for the Unusual Offer, 200; Don’t Let Built-In Funding Pass You By, 202; Your Keys to Real Estate Riches, 203

CHAPTER 10: Count Your Way to Your Real Estate Wealth 205

Know the Numbers You Must Know, 205; Positive Cash Flow, 206; Monthly Debt Service, 208; Figuring Your Monthly Debt Service Cost, 210; Now Do the Simple Numbers, 211; Know What Your Debt Coverage Is, 212; Quickly Figure Your Capitalization Rate, 213; Now Put Your Numbers to Work, 213; Your Keys to Real Estate Riches, 214

CHAPTER 11: Turn Your Real Estate Holdings

Use Your Real Estate Equity to Build Wealth, 215; Tapping Your Equity for Profit or Fun, 216; Taking Steps to Repay Your Loan

xi

the Value of Your Equity Figured? 220; How to Increase the Value of Your Equity, 221; Use Your Increased Equity to Build Your Wealth, 222; How to Get around “Seasoning” Requirements, 224; Build Your Own “Bank” with Your Properties, 225; Your Keys to Real Estate Riches, 226

CHAPTER 12: Save Time and Build Your Real Estate

Fortune Faster

Learn the Fast Track to Real Estate Wealth, 229; Flip Real Estate for

a Quick Profit, 230; Sublet Properties for Non-Ownership Profits, 231; Use Options to Control Real Estate, 232; Be a Real Estate Loan Finder, 233; Build Self-Storage Wealth Today, 235; Build Big Profits

in Off-Campus Housing, 236; Use “Liquid” Real Estate for Your Wealth Building, 239; Be a Loan Correspondent for a Real Estate Lender, 241; Get Loans and Grants from Little-Known Sources, 243; Make an Excellent Income Upgrading Older Rental Units, 244 Finance Your Real Estate Down Payments at 0 Percent Interest, 246; Your Real Estate Wealth Schedule, 247; Best Rules for Your Success

in Income Real Estate, 253

Useful Real Estate Books, Reports, Training Courses,

and Newsletters for Beginning and Experienced

THIS BOOK SHOWS YOU HOW TO BUILD YOUR REAL ESTATE RICHES IN YOUR

spare time on zero-cash—that is, borrowed money

“How can you,” you ask, “show me how to get rich in real estate on zero-cash borrowed money?” My answer to you, given very politely, is:

• For years I’ve owned valuable residential real estate and have

watched it grow in value—every month of the year, and every year I’ve owned the property

• For years I’ve been President, and am now Director, of a large

lending organization that has made—and continues to make— many millions of dollars in real estate loans every year During this time I’ve searched for ways to make more real estate loans, while approving thousands of applications for these loans So I’ve sat—and do sit—on both sides of the Loan Officer’s desk

• For years I’ve written—and had published by major publishers—

books and newsletters on real estate borrowing and business finance procedures Users of these books and newsletters write me thou-sands of letters, e-mails, and faxes telling me how they’re earning big money in real estate using my suggestions and ideas on zero-cash spare-time methods And thousands more of these readers call me

on the phone to tell me what they’re doing in real estate or to ask questions on how they should proceed with a particular deal

So—good friend—I’m in, and I’ve been through, the entire real estate “scene”—I’ve survived and prospered So, too, have many of my readers And you can likewise start and build your wealth in real estate today using zero cash, possibly even with poor or no credit

If you’re a Beginning Real Estate Wealth Builder—we call such

peo-ple BWBs for short—this book is for you Or if you’re an Experienced Real Estate Wealth Builder—EWB for short—this book is also for you

This book shows both BWBs and EWBs how to build wealth in real estate on zero-cash borrowed money Thus, using this book, you can get started in real estate without using money from your own bank account Instead, you will get started on zero cash—namely borrowed money And you are shown how to get started even if your credit is not the best So people who’ve had personal problems—illness in the fam-ily, divorce, loss of job, or other problems—can get started in income-producing real estate on zero cash by using borrowed money It isn’t always easy but it CAN be done—and this book shows you exactly how

to get started

To help you understand what you can do—and how you can do it— you are given dozens of actual letters from readers telling exactly what they’re doing to acquire—and profit from—income real estate today, using what we call zero cash—no money from their own pocket or pocketbook

If you want to examine these actual letters in the same condition that we received them, you have an open invitation to visit my Manhattan office to see the letters All we ask is that you give us a day’s notice so we can arrange desk space for you—to make you com-fortable while you read the letters that interest you

As you read this book you’ll get hundreds of smart, proven, practical ways to take over income real estate using borrowed money—zero cash And I show you exactly how and where to get the money you need for these takeovers

Using this book, you’ll learn how to “figure the numbers” of a

prop-erty You’ll see how much MIF—Money in Fist—you’ll have at the end

xv Introduction

of each month MIF is money you can spend on your own needs—your home, food, entertainment, vacation, children’s education, etc And—

if you take my suggestions—you’ll use a large part of your MIF to buy more income property to increase your MIF and real estate assets!

“Why have you written this book?” you ask “Aren’t you giving away your money-making secrets?” My courteous answer to you is: “I’ve written this book because I want you to have a better quality of life, which comes from a larger income in real estate—most of which is tax-sheltered.”

There’s so much real estate in this world that no person could ever own it all So I’m really not giving away secrets I’m just sharing with you some of my real estate experiences that—hopefully—will make you a happier and more productive person in your own real estate endeavors Thus, in this book I show you how:

• An airline pilot—laid off after 9/11 because of the drop in air

travel—was able to buy three properties after his layoff and is now

“doing better financially than ever before.” See Chapter 1

• A reader bought 4 properties in 3 months with zero cash down

and “received several thousand dollars back at the closing on each one.” See Chapter 2

• Another reader “bought 6 rental houses without putting in a

penny of his own cash”—he was broke but had excellent credit and experience See Chapter 3

• In just one year a reader “acquired over one million dollars of

property with zero cash down, and pulled a considerable amount

of cash from the transactions.” See Chapter 4

• A reader, passed over for a deserved promotion in her job,

resolved to get into real estate Just 30 days later she bought her

“twins”—two identical side-by-side houses for $80,000 with zero cash down, and received cash at the closing See Chapter 5

• A beginner bought his first apartment house with zero money

down Then he bought a second one the same way See Chapter 6 Subsequent chapters tell similar real-life stories Finally:

• An overworked, two-job-holding restaurant waiter built a 7-figure

(that’s millions of dollars a year) spare-time income in real estate

starting with zero cash and less than $500 in his checking account See Chapter 12

Lastly, I’m as close to you as your telephone The last line in the last chapter of this book gives you my telephone and fax numbers, as well

as my e-mail address Just call me—I’ll answer you on the first ring and try to help Or fax or e-mail me I’ll answer as soon as I can, after tak-ing care of all my newsletter subscribers!

Good luck to you in your real estate ventures!

TYLER G HICKS

MORE FORTUNES ARE BUILT IN REAL ESTATE ON BORROWED MONEY THAN

in any other popular business And you can build your fortune in real

estate using borrowed money—if you follow the tips given in this book How can I make such a statement?

Thousands of my readers write, call, fax, or e-mail me telling how they’re building their wealth in income real estate using borrowed money to start Many of these readers do this by following the tips in one of my books, newsletters, or courses Their letters, calls, faxes, or

e-mails prove to me that you can make big money in real estate today,

starting with money you borrow from others

Here are three letters showing how Beginning Wealth Builders

(BWBs for short) get started in income real estate on borrowed money (The state or country in which the BWB letter writer has his/her real estate

is given at the end of each letter.)

Twenty Units in One Year

“I talked to you briefly last night and I want to thank you from the bottom of my heart for the courage you gave me in your books one year ago I read two of them one year ago by accident I ventured out to buy my first fourplex with zero money down Thanks a bunch for those books I now have 20

when I read your books Again, thanks a bunch.

Cashing Out at Your Closing

“I just bought a 3-bedroom house with an attached garage at

50 percent of appraised value and cashed out $5,100 at closing This is my fourth straight zero down deal.

—Virginia

(Note: “cashed out” means the buyer received $5,100 at the closing of the purchase.)

”

Airline Pilot Finds a New Career

“I read your book out of a desire to become involved in real estate investing I’m an airline pilot and September 11 caused

a huge disruption in my industry Luckily, I have been able

to purchase three properties since my layoff and I am doing better financially than ever Thank you for your words of wisdom; they definitely helped motivate and inform.

—Pennsylvania

If you’d like to examine any or all of the letters cited in this book, just give me a call on the phone You’ll find my telephone and fax numbers listed in the last paragraph of the last chapter (Chapter 12) in this book Please allow us a day to assign you a desk in my Manhattan office where

3 Build Your Real Estate Wealth on Other People’s Money

you can spend as much time as you wish examining the actual letters— just as we received them

Invest in an Item of Lasting Value—

Income Real Estate

Buying a piece of real estate or dealing with a piece of real estate allows you to work with an item of lasting value Why is this? Because the land

on which the real estate value is based will never go away It is there ever So, too, is its value

for-I know you can tell me that in some sections of the world the land falls into the sea and disappears This is true But the amount of land to which this happens is such a small percentage of the world’s total that this event can be ignored (And I assume that you have enough sense not to buy such land!)

Recognize the Many Pluses of Real Estate

All real estate has a certain basic monetary value that usually rises as time passes But there are other advantages, besides the usual rise in value, to making your fortune from real estate Here are some typical advantages:

• In real estate, you are in a “borrowed money” business; this

means that it is easier for you to start by using Other People’s Money (OPM)—even if your credit is not the best when you start

• In most real estate deals, little of your labor or time is required

for the usual piece of income property

• As a property owner, you are entitled to and can enjoy enormous

legitimate and legal tax savings on your real estate income

• Almost all real estate is an excellent asset on which you can

bor-row more and more money as your property rises in value (money to buy more and more income-producing property!)

• Nearly the entire world is in the midst of a real estate boom;

hence your property will almost always rise in value with the sage of time

pas-• You can wheel and deal in hundreds of ways in real estate to

reduce the amount of money you need to borrow to get started

• When you pick your properties carefully, failures are almost

unheard of in real estate income property holdings

You’ll tell me, I’m sure, that there are many other advantages you will enjoy while you build your wealth in real estate using borrowed money Good This shows you know your goals and you are ready to work towards those goals

Speaking personally for a moment, I have been a real estate investor/entrepreneur for a number of years while at the same time I run several other businesses and work as a consultant for a Fortune 500 firm Although I make good money from my other businesses and earn comfortable consulting fees from my regular career, nothing can equal the advantages that my real estate investments give me I own real estate, while at the same time I:

• Serve as director of a large money-lending organization annually

making millions of dollars of real estate and other types of loans

• Regularly do writing services for some major firms

• Plan and publish two internationally circulated and respected

monthly newsletters covering real estate and business financing

• Author—that is, write—one or two new books a year

• Market some 15 marine products to boat owners all over the world

• Give lectures in many parts of the world to businesspeople and

Beginning Wealth Builders (BWBs) and Experienced Wealth Builders (EWBs) on real estate and business

• Enjoy a great family and leisure life

And I am fully convinced that you, too, can have many of the above joys So I am giving you in this book what I believe are the essential keys

to becoming rich in real estate using borrowed money to finance your fortune

The tips I give you in this book are based on my years of personal experience in the fields of borrowing money, lending money, investing in real estate, and seeing that real estate rise in value, year after year You, too, can do the same—or even better than I have done!

5 Build Your Real Estate Wealth on Other People’s Money

Build Your Real Estate Riches Minute by Minute

As I mentioned earlier, hundreds of people contact me each year to tell

me of their adventures in real estate Here are several more typical letters written to me by some of my readers One of these BWBs was able to take over property worth more than $1,400,000 with zero cash down! Read these letters now to see how you, too, might do the same for yourself!

11 Units with No Cash Down

“Your books have been a major influence in my real estate investing success in the past 11 months I have a total of 11 units (1 single-family, 1 fourplex and 1 sixplex), all purchased with no cash down My money-in-fist (MIF) is $1,300 per

“I started using your techniques two years ago and built

$2,000 borrowed money into $120,000 net worth in two years I have a real estate corporation, a trout farm, and a

Averaging $167,777 per Year on Borrowed Money

“The result of reading your books speak for themselves:

In 4.5 years I took over four properties with these values:

No 1 $525,000; No 2 $550,000; No 3

No 4 $135,000 Total value today $1,485,000 My mortgages total $730,000 So I built a $755,000 net value

in 4.5 years, or averaged $167,777 per year on borrowed It’s not easy but it’s well worth it And I think this is not bad for a Scottish immigrant!” —New York

Personal Cash Flow over $8,000 per Month

”

“Thank you for talking to me on the phone Your book has sure changed my life Since I first read your ‘three-year’ real estate book, I have amassed over one-half million dollars in real estate and two other rapidly growing businesses My personal cash flow is now over $8,000 per month, and my two businesses will do over $350,000 cash flow in the next

12 months All in less than two years and part-time—I still have my 40-hour per week salaried job —Texas

What do these letters show us, my good friend? They show you and

me a number of important concepts that I’ve been preaching for many years, namely:

• Income property can be bought on zero cash

• BWBs can make money with 100 percent financing

• You can get help as a Beginning Wealth Builder

• Wealth-building deals are available today

• Any BWB can wheel and deal on prices

• Knowledge does pay off in real estate—I told YOU so!

• Finding a good property encourages you to look for more

• You have a great future in real estate—if you work at it!

By including the letters above, I am trying to show you what actual, real people are doing these days And you, too, I believe, can do the same! But YOU must work at it and YOU must:

• Keep trying to build your real estate wealth—never give up!

• Plan to achieve what you want in real estate—and then work your

plan!

• Know there is a property for you You must keep looking until

you find it!

7 Build Your Real Estate Wealth on Other People’s Money

• Wheel and deal whenever you can—it’s fun and profitable!

• Decide to learn all you can about the real estate business!

Now you know that it is possible to take over real estate for very

lit-tle money down Or, in some cases, you can take over real estate for zero cash down This is one of the greatest advantages that real estate offers the BWB today

Please keep in mind that all the examples you will read about in this book are drawn from the actual experiences of living, breathing BWBs

So they reflect real-life experiences What’s more, I keep the actual ters in a bank safe deposit box But you are welcome to read them in New York City any time you wish Just give me a few days’ notice and you can study them as long as you want

let-Start-Ups Win in Almost Every Real Estate Deal

Forget about needing a college education to make it big in real estate

I know thousands of people who are actively earning big money in real estate today Few of these people have ever seen the inside of a college classroom Many of them have never even been on a college campus, and a number of them could not produce a high school diploma if asked to do so Yet they are earning large incomes from their real estate investments I firmly believe that you, too, can do the same—with or without a formal education

You do, of course, need some basic know-how in real estate It would

be foolish to try to take over income property, make real estate deals, or start a real estate investment company without knowing what you are

doing But in real estate, you can learn while you earn, because:

• Most income properties are easy to buy and run

• By hiring an accountant and an attorney to help you with the

busi-ness and legal aspects of your real estate you can avoid problems

• Help is easily and readily available from thousands of people in

real estate who are ready to assist you when you have questions about your real estate plans

• You will gladly learn more about how to increase your income

when money is flowing into your bank from your rental properties

Do not call me, e-mail me, or write me to say, “I don’t know what I

am doing; hence I can’t make money in real estate!” This is a give-up

excuse that only annoys me Please do call or write me, and I will be

glad to try to help you, if you’re trying to build your real-estate ings But I will refuse to try to help you if all you want to tell me is about the number of times you tried to do something and failed What

hold-I want to hear about is the number of times you tried to do something and succeeded, like these readers who wrote:

and Cash Back at Closing

—Oklahoma

Triplex with No Cash Down

“Purchased a triplex with no money down and cash back at settlement for rehab Seller said it was the best deal he had

Three Pieces of Real Estate with Zero Money Out of Pocket

“I just purchased my third piece of real estate with zero money out of my pocket Two properties are rental homes with about $200 positive cash flow per month each

Third house is our dream house All these have a value

of $160,000 and were purchased with zero money out of

my pocket—well almost, the last home I put about $300 out of my pocket for $80,000 I am presently employed as

a firefighter and I found rental properties are a great second job I am starting my 22nd year as a firefighter; so retirement is not far away I plan on taking your advice and double my real estate holdings every two years or sooner I

am only 43 years old and will be in my early fifties when

I retire I will need the extra income!”

9

—Ohio

”

”

I’m the First to Say Zero Down Deals DO Work

“After reading several of your books I purchased several real estate units I currently own three up-and-down doubles and I’m working on a deal to buy two townhouses The owner is willing to refinance these townhouses and sell them

to me on a land contract Some people say ‘no money down deals’ don’t happen I will be the first to say they do!”

From $1,000 Borrowed to $225,000 Value

“I read two of your books and followed your advice for the purchase of two beautiful properties in New Jersey I bought the first one, now worth about $225,000, with a borrowed

$1,000 down payment I am now ready for more substantial

Apartment Building for $500 Down

“I purchased one apartment building for only $500 down and $500 closing (it was a repossessed building) using the method Ty gave in a recent issue of his Newsletter I am now negotiating for four more buildings from the same bank.

—Texas

Another $500 Down Nets $8,000 Profit

“I have three of your books Because of your inspiration

my wife and I bought a building eight months ago for $500

” —Minnesota

down and recently sold it for a net of $8,000 Thank you for

your help.

Speedy Results Are Possible in Real Estate

My education is as a mechanical engineer After graduating from neering school, I obtained my license as a Professional Engineer For a number of years I worked as a consulting engineer During my education and my consulting engineering activities, I always enjoyed working with numbers All of my business life has been directed toward num-bers, such as the six classes of numbers I look for in real estate, namely:

engi-1 The four numbers I need from you to advise you on whether a

proposed real estate investment in income real estate will be

prof-itable for you These numbers are: The Price, The Income, The Expenses, The Down Payment I call these numbers the P, I, E,

and D of investment real estate

2 The precise numbers of making a fortune in real estate using

borrowed money (you will see these numbers later in this book)

3 The average number of hours it takes to build a real estate

busi-ness that has $1 million worth of income property

4 The usual number of weeks or months it takes to acquire a

typ-ical income property

5 The happy number of dollars you can “walk away with” each

month from each income property you own

6 The very small number of errors I have seen BWBs make in the

income real estate business

When you analyze an investment in advance and have good legal advice, these numbers are all in favor of you, the BWB in real estate Why do I say this? Because the numbers that give your time input, money input, energy input, and “worry” input are all very small But

11 Build Your Real Estate Wealth on Other People’s Money

the numbers that give your chances of being successful and the income that you can earn are very large! Listen to the following BWBs who wrote to me:

”

$1.2 Million in Assets on Little or Zero Cash

“I have benefited substantially from many of your real estate books I now own 20 properties (78 units) with a value of over $1.2 million All these properties were bought with little, or zero money, down —Nebraska

From Rentals to Sales

“Your books and inspiration helped me buy five houses with absolutely no cash! I now have $425 per month positive cash flow and $1,000 in security Also, three tenants want

to buy their houses with over $10,000 profit in each to me!”

—Virginia

Get the Seller to Carry

“Thank you for the time you spent with me on the phone

By answering my questions and explaining to me how

to structure a zero-cash-down deal, I was able to buy a

$300,000 building for $240,000 while putting up none of

my own money I got a first mortgage for 80 percent of the purchase price and the seller carried the rest After all expenses and debt service I have an annual cash flow of

$7,100 Not bad for the first one!” —Florida

”

Home Equity Loan Gets a BWB Started

“I started out to become a millionaire 19 months ago with the idea of making it in five years So far I’ve acquired about $200,000 in income properties and lakeshore raw land I had no cash when I started this venture, but acting

on the advice in one of your books I borrowed $10,000

in the form of a mortgage on my home Since I had an excellent credit rating, I was able to buy two income buildings for $1 down on each I just sold one of them for a net profit of $2,000 after owning it a year I bought another building with 8 apartments for $63,000 with $1 down;

I could sell it now for a $10,000 net profit There is no possible way I could put a price on the value your books have been to me in the past year and a half —California

Get in on Zooming Worldwide Growth

Traveling throughout the world, I watch real estate deals being made by various people, many of whom are beginners These deals are often truly fantastic! Here are a few recent ones I’ve seen reported in the media:

• A real estate BWB in California made some $200,000 in 10 months

from a property he bought using borrowed money and sold after making some minor repairs to the landscape

• A Canadian real estate BWB bought four pieces of property

val-ued at $4 million for just $4—one dollar on each!

• A young BWB took over eight houses and one building lot in his

first eight months in the real estate business His holdings are ued at $350,000 and he mortgaged out with $27,000 in tax-free money The $650 he put down was borrowed money!

val-• Many other mortgaging-out deals exists in which the BWB put

down zero cash and came away with the ownership of the erty plus money in amounts from $5,000 to $35,000

prop-13 Build Your Real Estate Wealth on Other People’s Money

Since such deals are being made almost routinely, I have full faith that you, too, can do much the same if you follow the ideas and hints I give you in this book I have nothing to sell you, good friend, except your success in income real estate!

Good Financing Can Be Yours Even

with Bad Credit

It would be great if you could spend a day with me in my lending ities to see how much money is available to BWBs seeking real estate of some kind For some years I have been Director of a rapidly growing lending organization Prior to becoming Director, I was President and Chairman of the Board of the same lending organization During these years, we have been “busting at the seams” with money

activ-Ever since our lending organization was granted the right to make real estate mortgage loans of various types, the Board and I have spent hours discussing why we could not find more people to borrow our money for real estate purposes Yet when we checked with other lenders

of a similar type, we found that they, too, had the same problem—they could make only a few loans when they wanted to make many

Why does this situation exist? We have come up with a number of reasons for our lending organization and for similar ones These rea-sons are as follows:

• We are competing with many other lenders Since there is a lot of

money around for real estate purposes (actually, billions of dollars), our prospective borrowers go to them for the money they need

• Qualified (and many unqualified) borrowers find it easy to get

money from various lenders So they seem to think of us last

• Borrowers who have a good income property or any other

attrac-tive type of real estate are a magnet to most lenders who are ious to make a loan This means that there are probably more lenders than borrowers at certain times So we lose out

anx-While you may doubt what I say, the situation I detail is not unusual

in my experience Many other lenders to whom I speak on a regular basis tell me they run into the same problem They just cannot find

enough qualified borrowers for the money they have available to lend for real estate

Take the Billions Being Offered to Real Estate

Investors Today

Your reaction to the heading directly above might be intense laughter

If so, please don’t call me to tell me you tried 116 lenders and they all said no I know what our situation is; I wrestle with the problem of finding more borrowers for our real estate money Plenty of my friends

in the business tell me they, too, have the same problem

Since I have actual, daily, experience in lending money for real estate

purposes, I know that you can find the money for your real estate deal

that involves attractive and “lendable” properties A lendable property

is one that has a value somewhat greater than the amount of the loan you seek Of course, if the property is worth a lot more than the loan you seek, your borrowing will be made much easier

Because I struggle daily to find more real estate borrowers, I am

con-vinced there is plenty of money around for your real estate deal All you

need to do is go out and look for the real estate money you need! You can look for this money in a number of ways, such as:

• Writing to various lenders asking them if they would be

inter-ested in your real estate loan

• Calling lenders in your area who might be interested in lending

on your real estate proposal

• Visiting in person lenders whom you think would be willing to

help you

• Looking on the Internet for real estate lenders who might work

with you on the deals you have

• Reading the Real Estate Section of your local large-city Sunday

newspaper, looking for ads run by lenders in your area

• Consulting the various directories of real estate lenders listed at

the back of this book to find the names, addresses, and telephone numbers of many lenders One of these lists contains 2,500 names

of active real estate lenders

15 Build Your Real Estate Wealth on Other People’s Money

So please believe me—good friend of mine—when I tell you that real

estate money is available to you What you have to do is look for it in a

way that you find is suitable to your lifestyle and method of looking! And by using the smart and proven methods we give you in this book,

you can borrow your way to real estate riches! Take it from someone who

works both sides of the street as:

• A borrower for real estate investment purposes

• A lender who loans to real estate investors

Forget about a Real Estate License When

You’re an Investor

Many BWBs I talk to think they must have a broker’s or salesperson’s

license to invest in real estate You do not need a real estate license of any

kind to invest in real estate for a profit! Most brokers and salespeople I know do not invest in real estate Instead, they’re more interested in earn-ing commissions than they are in investing True, while I do know some BWBs who are licensed, the main reason they got their license was not to earn money selling real estate

Instead, the purpose in getting the license was to save the sions they otherwise would have had to pay a broker Some of these readers use sales commissions in place of the down payment on a piece

commis-of income real estate Having the license permits them to take over tain properties with zero cash down

cer-Again, you do not need a license of any kind to make your fortune as a

real estate investor Keep this fact clearly in mind at all times as you read the remaining chapters in this book And your age makes no difference, as the following BWBs told me in recent letters:

Become Carefree about Money Early in Your Career

“At present I own six of your books Using the principles explained in them, I have gone from zero to owning

”

$250,000 of profitable, well-located income property in less

than two years My income allows me modest comforts of

living, debt retirement, plus a healthy surplus I was offered a

$250,000 project for $20,000 down, which I borrowed I feel the hardest part is now behind me Thanks to your books, in

no small part, I became financially independent on my 25th

”

—Illinois

Trailer Park Success

“I’m glad to inform you we bought a 102-space trailer court with 21 acres of land, a complete water system, a lagoon, laundry with machines and four trailers for $109,000 We raised the money using your methods, borrowing $78,000 from a local Savings and Loan Association Then we got a

$10,000 mortgage from the seller and $21,000 of borrowed money was put up by my partner When we closed the deal

I became half owner of the property without making any payments from my pocket In fact, I received a $3,000 finder fee for locating such a nice deal for my partner.

Get into Non-Ownership Income Real Estate

Most BWBs thinking of building their fortune in real estate assume they must do so by owning income-producing property Such owner-ship is not necessary! You can make a fortune working deals on prop-erty you do not own

Still, you might ask: “Do I need a license to work on non-ownership

deals?” You do not need a license to work real estate deals on property

you do not own There are many activities that can make you money in

17 Build Your Real Estate Wealth on Other People’s Money

the world of real estate that do not require a license Typical money makers you can use are:

• Income property management for a fee

• Real estate Limited Partnership formation for a fee and a piece

of the partnership, with proper legal guidance

• Holding special properties, which are needed for a large project,

for selected clients and assembling the properties into a larger parcel

• Money finding for real estate investors for a fee by acting as a

financial consultant

• Buying and selling real estate options for big profits

• Acting as a Second Mortgage Lender for real estate investors

• Flipping (selling) desirable properties you buy with an option

and sell for a profit NOTE: Recently, new terms have been used for flipping, including: Fast resale, Swift resale, Rapid resale, Prompt resale, and Speedy resale

There are many other ways you can earn money in real estate out owning property Activities listed above are just a few in which you can make big money today In none of these will you own property Instead, you will deal with properties that other people own The money you earn will usually be free of any real estate property taxes, points, or fees

with-Furthermore, as your fortune grows, you may find it profitable to:

• Invest some of your money in real estate stocks and bonds (I

have done especially well investing in local public real estate ect municipal bonds.)

proj-• The money you invest in these projects helps provide good living

space for people needing it

• The interest you receive on the money you invest in municipal

bonds is free of income taxes

• Both the owner of and the investor (you) in the properties

ben-efit financially

You can also earn money in many other ways in real estate that do not involve the ownership of property These ways will be given to you later

in this book I’ll show you how to use each of them

Plenty of Free Advice and Assistance Can Be Yours

Income real estate is not a complicated business You’ll find that many attorneys and accountants know the ins and outs of real estate So you

do not have to run around looking for people who know things about

a business that is highly complicated How can we say this? Because:

• Experienced real estate attorneys can easily draw up the papers you need to buy or sell real estate

• Documents such as leases, security agreements, and maintenance contracts are almost what attorneys call “boilerplate.” Nearly every document you’ll ever need can be found in the standard reference books containing often-used documents for real estate attorneys

• However, you must always have the advice and guidance of a

com-petent real estate attorney whenever you buy or sell any real estate

Likewise, you should also have the services of a competent fied Public Accountant (CPA)

Certi-Your accountant will not have much of a problem with the average real estate deal Why do I say this about accountants? Because the arith-metic aspects of real estate are well known to accountants You can eas-ily learn them yourself if you wish

I suggest that you get to know the “numbers” of real estate because doing so can mean a big difference in your income Later in this book you will get you started on the numbers you’ll need to know to borrow your way to real estate riches

Grow Rich with Tax-Sheltered Real Estate Income

Regulatory agencies constantly revise the tax laws Various loopholes are closed soon after they’re discovered Result? A larger bill for most taxpayers But real estate has hardly been affected by these changes You will always have major tax-saving advantages as the owner of income real estate Why?

19 Build Your Real Estate Wealth on Other People’s Money

• Because most governments encourage the construction and

operation of safe, clean, and affordable housing

• If you can provide such housing, you can easily get the financing

you need and you will be allowed generous tax advantages

• Thus, the depreciation allowance alone can shelter your cash

income from a piece of real estate This means that the money you receive after having paid your expenses, real-estate taxes, and mortgage is free of both federal and state income taxes

Can you ask for any better break? And you get these breaks by using borrowed money as your starting capital! So get to know the numbers

of real estate tax savings Truly, good friend:

• You cannot make big money today on a salary from a job!

• The only way you can build a fortune today is with a business of

your own

• And, in my opinion, real estate is the best business anywhere for

a BWB

• It is almost impossible to fail in this great business if you choose

your properties carefully

• And the tax savings that you are often offered is one of the

rea-sons why the failure rate is so small!

National governments encourage real estate wealth builders by ing them enormous tax savings Why don’t you get some of these savings

offer-by getting into real estate today? I am certain you will never regret it!

Winners Are the Real Estate Norm

Studies by respected organizations show that about 80 percent of the new businesses formed by people fail within the first two years But these figures do not apply to real estate because very few new real estate projects fail Why? Because:

• Adequate, well-maintained housing and commercial and trial space are avidly sought by renters in almost every area of the

indus-world

• Highly desirable properties are hard to come by since

construc-tion rarely keeps up with demand

• Proving the maxim, “Location, location, location,” good

loca-tions are often rented long before a building is completed

• Businesspeople know that a good location can mean the

differ-ence between failure and success for a business firm

• Property vacancy rates, often assumed to be 5 percent for

finan-cial analyses, are typically less than half a percent in well-located property

• Desirable properties that have been rented for years become

popular, and almost as soon as a vacancy occurs someone shows

up to rent the space (The vacancy rate in some properties I know

of has been 0 percent for 10 years!) Thus, it really is almost impossible for you to lose money in well-located real estate Also, if you buy an existing building—as I always recommend for your first purchase—your chances of success are even higher Why is this? Because if a building has been operating for, say,

10 years, you can easily check its records for the entire period Also, you can check the income tax returns of the building to learn what the true expenses were With such information on hand, it is hard

to make a major mistake What all of this amounts to is this tant fact:

impor-Income real estate is probably the safest investment you can make Also, income real estate is probably the best investment you will ever make in your entire life And you can make this investment without putting up a cent of your own if you use borrowed money!

My friends and I in the real estate field are so enthusiastic about our business that we try to convince almost everyone we meet that it is a worth-while way to earn their living I want to convince you of the same because real estate has been good to me and to thousands of other people I know This is why I am ready to help you start building your real estate for-tune using borrowed money for your starting capital Here’s what two highly enthusiastic BWBs wrote me about using borrowed money in real estate

21

equity

.”

Zero-Cash Real Estate

“I bought my first building (an 8-family) I snatched it from

a seller who wanted out quickly The price was a bargain, with a $60,000 annual rent income I applied for a $300,000

mortgage I did not have any money for the down payment, so

my only option was a zero-cash deal Several banks offered

me a $225,000 first mortgage because the rent roll was high That meant I had to come up with a $75,000 down payment (I never had this much money in my life!) I got the seller

to hold a second mortgage for $30,000 and I took a second mortgage on my mom’s house and my grandfather’s house for $45,000 At the closing the seller gave me a ‘Seller’s Concession’ for $20,000 which covered my closing costs

The rents have paid for all loans and I have never missed a payment Since most of my tenants are Section 8, my money comes directly from the Government

I recently refinanced the building to take cash out Since the building was bought under market value, I had ‘built in’ Also, the equity in the building has risen in the two years I’ve had the building and the property is appraised at

$430,000 I refinanced the original loan that was at 8.5%

I was able to take out $108,000 in cash

to use the money to make improvements and for the down payment on other income property —New York

“Plastic” Wealth Building Is Popular

in Real Estate Today

“I started out a year ago with an old, but sound, four-family [house] that had been run down I bought it for $35,000, the seller holding a $30,000 first mortgage at 8.5% for 20 years

I borrowed $5,000 from my credit card for the down payment and took out home improvement loans from five different